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EXAMPLE 12.5-10 S60 A manufacturing company of microwave ovens uses 75,000 worth of LED readout circuits annually in its production process. Cost per order is 2 45 and the carrying charges assessed against this classification of inventory are 25% of the average balance per year. This company follows ar E.O.Q. purchasing system and to date has not been offered any discounts on these circuits. Now the supplier has indicated that if the company would bwy its circuits four times a year in equal quantities, a discount of 1.5% off the list price would be given in return. Would you advise this company to accept this offer? In order to maintain the present total cost, what should be the minimum discount acceptable to the company if four orders of equal sizes are placed in a year? (CA. (Final) Now, 1989)